Woodward v. Marshall

Morton J.

delivered the opinion of the Court. The lia< bility of the trustees depends upon the validity of the deed of assignment. This is in pursuance of the 238th chapter of the statute of 1836, and substantially conforms to its provisions. This statute made a radical change in the law of assignments by a debtor for the benefit of his creditors. Before, the debt- or might prefer some creditors to the exclusion of all others ; now, the distribution must be equal among all. Formerly, the property might be arrested in the hands of the assignees by at tachment; now, it is holden by them for distribution among all the creditors who, before the first dividend, may elect to become parties to the assignment. Although the demands of those who have signed the indenture, are not sufficient to absorb the whole avails of the property assigned, yet it cannot be known that it will not be needed to meet the debts of those who may eventually become parties. But however this may be, the statute makes “such assignment valid and effectual, against any attachment or execution thereafter made or levied on any of the property so assigned.”

Several objections have been urged against the legal obligation of these indentures, which we will examine.

1. It is contended that the description of the property assigned is so vague and indefinite, that the instrument is void for uncertainty. There is no doubt that every instrument of transfer must contain such a description of the grantee and of the property intended to be granted, that both may be identified with reasonable certainty. Worthington v. Hylyer, 4 Mass. R. 196. These are to be ascertained, not by any artificial or arbitrary rules of construction, nor by a rigid adhesion to the literal interpretation of detached phrases ; but by the plain import and meaning of the whole instrument. In any view of this assignment, we can perceive no essential defect of this kind. When the assignors undertook to convey “ all and singular, the real estate,” “ chattels, rights, claims, debts,” &c. the conveyance could only operate upon such estate, &c. as they had the power to convey, and therefore must be understood to refer to their own, estate, &c. But were this doubtful, a reference to the previous recital by them of their desire *473to apply the avails of their property according to the provisions of the statute, would make it sufficiently certain.

The ordinary rules of conveyancing must apply to and govern transfers of property for the benefit of creditors. There certainly is no reason why principles quite as liberal should not be adopted. A conveyance of all a man’s estate in a particular town, county or state, or generally of all a man’s property wherever situated, would undoubtedly be valid and operative. Bac. Abr. Grant, H; Jackson v. Delancey, 11 Johns. R. 373 ; Ward v. Bartholomew, 6 Pick. 409 ; Litchfield v. Cudworth, 15 Pick. 26. So in the return of an officer upon a writ, which is one step in a statute mode of conveyance and is quite analogous, the same description is always deemed sufficient to constitute a legal attachment. Taylor v. Mixter, 11 Pick. 341 ; Crosby v. Allyn, 5 Greenleaf, 453; Howard v. Daniels, 2 N. Hamp. R. 137.

2. The language used is sufficiently comprehensive and well enough chosen to convey all the individual, as well as partnership property.

3. The omission to annex a schedule of the property assigned and of the debts due, is not a fatal objection. A schedule, though a convenient and useful appendage, is not an essential part of an assignment. Whenever the instrument is intended to be complete without the schedule, and contains a sufficient description of the property, there can be no doubt that it will be an effective conveyance. Stevens v. Bell, 6 Mass. R. 339 ; Emerson v. Knower, 8 Pick. 63 ; Clap v. Smith, 16 Pick. 247. The instrument contains a stipulation, that a schedule shall be prepared and annexed when completed, and then become a part of the contract. This may be a covenant for the breach of which an action would lie ; but to suppose that it was a condition precedent to the operation of the conveyance, and that the instrument was not to be complete so as to vest the property in the assignees before the schedule was annexed, savors more of philological nicety than of sound construction.

4. The oath of the assignors appears to be in conformity with the proviso of the first section of the statute, and as far as practicable, in its very words. Were this oath proved to *474oe false, we cannot perceive how this fact would impair the right of the assignees to hold the property for the benefit of the creditors, whatever effect it might have upon the discharge under the 9th section. But we can see no foundation for this suggestion. The assignors swore that, by the assignment, they conveyed all their property. The objection is, that one of them conveyed some real estate by a separate deed. If the deed was anterior to the assignment, so that the pew passed by it, then it is literally true that all the property which the assignors had when they executed the assignment, passed by it. If the deed was subsequent to the assignment, then the pew passed by the latter instrument, the language of which as we have already shown, was broad enough to cover individual as well as partnership property. If both instruments, agreeably to the intention of the parties, took effect simultaneously, then tne assignees might elect to hold under either of them, accord mg to the interest of the cestui que trusts. But both being made to the same parties, for the same purpose, and subject to the same trusts, it cannot be material under which the pew is holden. The fairest way of treating them would be to consider them as one legal act, the deed being subsidiary to the assignment. But in either aspect we can discover no fraud, actual or constructive, much less perjury, in the transaction.

5. The clause in the assignment authorizing the assignees to work up the stock in the process of manufacture, is not, in our opinion, incompatible with the provisions of the statute, and certainly does not invalidate the whole instrument. It does not violate any express prohibition, and we cannot discover that it is at variance with the general object and spirit of the statute. The principal duty which devolves upon the assignees, by their acceptance of the trust, is to convert the property placed in their hands, into money, in a manner the most speedy and the most beneficial to the creditors. They of necessity have some discretion in the administration of the trust property. If it be perishable, they are bound to resort to the proper means for its preservation, until it can be advantageously disposed of. If there be no opportunity to sell, it must be taken care of till a favorable change in the market occurs. So if it be unsalable by reason of the unfinished state of its manufacture, we can *475see no reason why it shouh not be completed and prepared for market. And in our opinion, the authority here expressly conferred would have been implied by law as necessarily incident to the principal powers granted. Where the estates of insolvent men are liable to be transferred, and that too, generally, without much discretion in the selection of a propitious opportunity, it will necessarily happen that property of all kinds and in every stage of preparation for market, will come into the hands of assignees ; and unless they exercise the power of preparing it for market, it will often perish or be sacrificed. Of the propriety and expediency of the measures to be adopted, they must judge in the first instance. Whether they abuse their trust or not, may be inquired into in a proper form of ac tion.

6. The note given by one of the assignors in the name of the firm, even if fraudulent, and if the assignees participated in the fraud, would not defeat the rights of the creditors to have the trust fund administered according to the statute. It must be remembered, that the assignees do not hold for themselves but for others, and that it is not their interest, but the interests of innocent creditors, which are to be affected by the plaintiffs’ claim. The existence or the creation of fraudulent debts, will not avoid the regular assignment of property of insolvents for the payment of their debts. It is not even one of the grounds mentioned in the statute for invalidating the discharge. The proper time for the investigation of the validity of the debts of the assignors, would be when the respective claims of the several creditors are brought forward with a view to the distribution of the assets in the hands of the trustees.

Whether this note should be allowed, as a partnership or individual debt, or whether it should be rejected altogether, is not proper now to inquire ; because these inquiries would not affect the validity of the assignment, and because they never can arise in any form, inasmuch as the note itself has been cancelled.

Trustees discharged.